Dollar General Cuts FY23 Guidance; Stock Plunges

(RTTNews) - Dollar General Corp. (DG) said it is taking certain actions to accelerate the pace of its inventory reduction efforts and making additional investments in targeted areas, such as retail labor. Overall, the company expects an incremental operating profit headwind of up to $170 million in the second half of 2023 from the strategic actions and investments. To reflect these strategic actions and investments, softer sales trends and an increase in expected inventory shrink for the second half of 2023, the company revised its outlook for fiscal 2023.

For fiscal 2023, the company now expects EPS in the range of approximately $7.10 to $8.30, or a decline of 34% to 22%. Previously, the company projected an approximate 8% decline to flat growth. Same-store sales growth are expected in the range of a decline of approximately 1.0% to growth of 1.0%, compared to its previous expectation of growth in the range of 1.0% to 2.0%. Net sales growth is expected in the range of 1.3% to 3.3%, compared to its prior guidance of 3.5% to 5.0%.

Dollar General reported second quarter net income of $468.8 million, a decrease of 30.9% compared to $678.0 million, last year. EPS decreased 28.5% to $2.13 compared to $2.98. Analysts on average had expected the company to earn $2.46 per share, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items. Net sales increased 3.9% to $9.8 billion. Same-store sales decreased 0.1%.

On August 30, 2023, the Board declared a quarterly cash dividend of $0.59 per share on common stock, payable on or before October 24, 2023 to shareholders of record on October 10, 2023.

Shares of Dollar General are down 14% in pre-market trade on Thursday.

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